How to use other people's contacts, clients, and clout to generate a flood of new business

By John Jantsch

Nobody likes to cold call. Okay, very few people that I know like to cold call looking for clients. For those of you that fit that description, I have some good news. Stop it. Don't cold call ever again. Instead, let other people do it for you by systematically generating all the referrals you can handle.

That's right, many business owners have built their entire business using this one simple, but powerful strategy. People want to do business with other people they know, like and trust and by creating referrals you automatically borrow upon some one else's trust. For the small business owner this is a crucial point.

You see referred clients, if properly qualified, will turn into your best customers and will likely put a higher value on what you do and be less likely to leave for price.

So you get that you should generate referrals and maybe you even do so occasionally.  But you want to generate a flood of referrals, right?

Here's how:

Deserve referrals.

If your business or service doesn't wow someone then who is going to refer you? Consistently generating referrals is a bit of a mindset. Tackle every customer you generate as though your sole purpose in serving them is to generate a referral. Now, would that change your approach to service? Now you're not a sales person, you're a service person.

Target referral sources

Just as you must target your clients you must also target those clients, vendors, influencers, peddlers, or contacts most suited to generate the kinds of referrals you are after. Then you must educate them on just exactly who and what makes a good referral for your business.

Ask

People love to give referrals. Think about the last time you got a great deal on something or someone went over and above to help you--what was the first thing you did? You told everybody, right? Don't be shy about asking for referrals

Tell them how you intend to follow-up

The single greatest reason your friends, neighbors and clients may resist handing over referrals is because they had a bad experience in the past. They gave an eager sales person the names of their family and he still hasn't stopped hounding them. Let them know exactly what you plan to do and how you plan to do. Ease their past concerns and don't hound your referrals.

Make it easy for them

Don't just ask if they know anyone who might need what you do. Give specifics. I know a financial advisor who wants to work in certain high income neighborhoods. When he meets with his clients he puts a list of 50-75 names in front of them and asks if they know any one on the list. He always comes away with several highly qualified leads.

Let them participate

Don't just jot down names and head out into the night.  Ask them to call, email or write on your behalf. Hand them a suggested letter of introduction that explains what you do and why you will be contacting them. Get your client to mail a letter on your behalf. Placing a call on your client's recommendation can open some doors but nothing beats a heart felt letter of endorsement

Ask for testimonials

One very passive way for people to refer business to you is to ask them to write a letter that details some of the very specific benefits that they have gained working with your firm. The more the merrier.

Follow-up

When you acquire a lead, make sure that you act upon it quickly and make sure that you keep the communication open with your referral source. Let them know how much you appreciate their help and always let them know if you turn the lead into a client. Cigars and single malt scotch are my preference.

Reward them

There are many, many ways to encourage your clients and contacts to send you referrals. You can give them free or discounted rates on their own needs as a reward. You can send them a thank you in the form of a discount to pass on to a friend. You can give them cash. You can create a contest among your clients and give away a special prize to the client who refers the most business. You can create your own currency and give it away as an incentive. You can partner with a non-profit agency and give a portion of all referred business to that agency. You can send a gift to someone's office, such as balloon bouquet, and generate so much buzz they are forced to talk about how great you are.

Finally don't forget to make generating referrals an expectation of every client relationship. Let your clients know going in that you fully expect them to be so thrilled with the service you provide that they are expected to give you ten qualified referrals within the next six months.

Just saying that to every new client you land will make them realize that they made a great decision to choose to do business with your firm.

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John Jantsch is a marketing coach and the author of Referral Flood - How to create a flood of new business without spending one dime on advertising. You can get more information at www.ReferralFlood.com or by sending a blank email to subscribe@ducttapemarketing.com